New York, Inc. owns 100% of Brooklyn, Inc. and Queens, Inc. Taxable income for the three corporations for their first year was as follows: Which of the following statements is false?

Question

New York, Inc. owns 100% of Brooklyn, Inc. and Queens, Inc. Taxable income for the three corporations for their first year was as follows:  Which of the following statements is false?

Quizplus · Accepted Answer

If Brooklyn, Inc. is a foreign corporation, it cannot be part of a consolidated return as only domestic corporations can file consolidated returns. All other statements are true: the consolidated taxable income is $769,000, Queens, Inc. can benefit from its operating loss if a consolidated return is filed, and the corporations are not required to file a consolidated tax return but may elect to do so.